7. Restoration Hardware

Year-to-date Total Return (as of Dec. 12): 93.51%

Price-to-earnings ratio: N/A

Market Cap: $2.54 billion

Restoration Hardware (RH) has been a great turnaround story this year, having benefit from the luxury consumer and benefiting from the housing comeback and subsequent trend in home furnishings stores. The company has been undergoing a transformation from being purely a high-end furniture and domestics store to adding product lines including kitchen and tableware, as well as apparel and accessories under its RH Atelier brand.

Shares dropped on Friday following the company's surprise announcement that co-CEO Carlos Alberini, 58, would be leaving at the end of January to take on the role of chairman and CEO of Lucky Brand, which is in the process of being bought by Leonard Green & Partners from Fifth & Pacific (FNP).

The announcement late Thursday came in conjunction with Restoration Hardware's third-quarter earnings, which surpassed analysts' expectations. Still investors were disappointed with the 29% comparable sales growth in the quarter, hoping for a higher number. Investors were also hoping for higher fourth-quarter guidance, Wells Fargo analyst Matt Nemer said.

"While we acknowledge Mr. Alberini's industry expertise will be missed in the short term, particularly given the number of initiatives in progress, we believe the longer-term story including entrance into new product categories, the full line gallery rollout, and improving margins from scale and cost saving initiatives remains intact," Nemer wrote. He rates shares "outperform."

Nemer also points out that with Alberini leaving one possible risk is that the company could experience a slowdown in new initiatives being rolled out (though he says this will likely be product related as opposed to opening new stores).

Gary Friedman, chairman and co-CEO said in a statement Thursday that the company was "developing a transition plan and will initiate a search for Carlos' replacement shortly."

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